Advice on DSCR Lenders with No Real Estate Experience

Member since 2023 · 2 posts · 2 votes

Hi all -

Any advice on DSCR lenders? I want to buy a single-family investment property in the St. Louis area around the $70k mark. Assuming a 75%–80% LTV. Proforma is at a 10% interest rate, and the respective DSCRs are (2.267) for 75% LTV and (2.125) for 80% LTV. I've talked with several lenders, and most want previous experience (owns home and investment property), which I have neither. I am flexible on LTV, interest rate, and term length.

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Devon Telberg

Architect · Saratoga Springs, NY · Member since 2023 · 3 posts · 2 votes

Quote from @Nate Herndon:

Quote from @Account Closed:

Hi all -

Hi Harry, I do know of some loan programs that can go as low as $75k value/purchase price and $50k minimum loan amount. First time investor status is not an issue either, just need to hit a 1.00+ DSCR on a 30-year fixed. Will PM you with some details.

Hi Nate, I went to your website and interested to learn more information. Filled a form from the website.

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Jesse Holsapple
Lender · Fountain, CO · Member since 2022 · 124 posts · 32 votes
3y
The hardest part here isn't going to be experience for a rental loan like the DSCR loan, it's going to be the price point. Most lenders don't go below 100,000 funded (after a down payment). You're starting with a purchase price of 70,000 roughly with 20-25% down from there.
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Ryan Muska
Lender · Saddle Brook, NJ · Member since 2023 · 431 posts · 231 votes
3y
I agree with @Jesse Holsapple
Lots of lenders will work with FTHB or First time investors, but not a lot are going to work with loan amounts under $100k.
My recommendation is to get a loan from a PML or HML if you want this property and you don't want to use your income to qualify. And expect those interest rates to be quite high
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Wyatt WolffPro Member
Lender · Charlotte, NC · Member since 2019 · 467 posts · 279 votes
3y
Yes, as Jesse said, that price point will be problematic. If I find a lender that will go that low, I will let you know!
[email protected]
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Nate HerndonPro Member
Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
3y
Quote from @Account Closed:

Hi all -

Any advice on DSCR lenders? I want to buy a single-family investment property in the St. Louis area around the $70k mark. Assuming a 75%–80% LTV. Proforma is at a 10% interest rate, and the respective DSCRs are (2.267) for 75% LTV and (2.125) for 80% LTV. I've talked with several lenders, and most want previous experience (owns home and investment property), which I have neither. I am flexible on LTV, interest rate, and term length.

Hi Harry, I do know of some loan programs that can go as low as $75k value/purchase price and $50k minimum loan amount. First time investor status is not an issue either, just need to hit a 1.00+ DSCR on a 30-year fixed. Will PM you with some details.
[email protected]417-605-2196
1 Reply
Devon Telberg
Architect · Saratoga Springs, NY · Member since 2023 · 3 posts · 2 votes
3y
Quote from @Nate Herndon:

Quote from @Account Closed:

Hi all -

Any advice on DSCR lenders? I want to buy a single-family investment property in the St. Louis area around the $70k mark. Assuming a 75%–80% LTV. Proforma is at a 10% interest rate, and the respective DSCRs are (2.267) for 75% LTV and (2.125) for 80% LTV. I've talked with several lenders, and most want previous experience (owns home and investment property), which I have neither. I am flexible on LTV, interest rate, and term length.

Hi Harry, I do know of some loan programs that can go as low as $75k value/purchase price and $50k minimum loan amount. First time investor status is not an issue either, just need to hit a 1.00+ DSCR on a 30-year fixed. Will PM you with some details.

Hi Nate, I went to your website and interested to learn more information. Filled a form from the website.
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Matthew CrivelliBusiness Member
Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
3y
@Account Closed
We won't with new investor but not at that price point. You are going to have a really hard time finding a lender who can fund deals that are worth less than 100k as-is value.
[email protected]413-348-8346
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Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
3y
If you are seeking any property less than $94,500 sales price hypothetically, you won't find a loan. Thats because at 80ltv max and $75,000 min loan amount thats basically the bottom of the boat. If you go below this threshold, you are now in the space of blanket and portfolio financing which you can do, just need at least 3 properties to bundle together
[email protected]860-538-3672
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Nate HerndonPro Member
Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
3y
Quote from @Devin Peterson:

If you are seeking any property less than $94,500 sales price hypothetically, you won't find a loan. Thats because at 80ltv max and $75,000 min loan amount thats basically the bottom of the boat. If you go below this threshold, you are now in the space of blanket and portfolio financing which you can do, just need at least 3 properties to bundle together

@Devin Peterson Please see my above post mentioning the minimum required value of $75k and a $50k minimum loan amount on a 30-year DSCR. If anyone has further questions about this program, I would be happy to address them here in the forum.

o 30-year fixed term
o 1.00+ DSCR minimum for 80% LTV
o 0.65+ DSCR minimum for 65% LTV
o $75,000 minimum property value
o $50,000 minimum loan amount
o REI experience not required
[email protected]417-605-2196
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